US 7653597 B1
A payment administration system includes a system administrator, customer and merchant interfaces, and a database. The payment administrative system also includes bank interfaces, credit agency interfaces to facilitate automatic, paperless transactions rapidly. The customer is permitted to set a number of purchase and payment parameters, such as hours of use, goods or services category, and daily limits. The payment administration system generates real-time notification of any action occurring on the customer's account and permits continuous monitoring of the status of each transaction in real time.
1. An administration apparatus for directing payments financial obligations of a customer that is a consumer of goods or services, the apparatus comprising:
an administrator having a database and an administrative program, the database including a customer file, the customer file including a purchase parameter, the purchase parameter being predefined by the customer, the administrative program including a merchant approval program and a collection program, the merchant approval program being operable to query the customer in response to approval request wherein the purchase parameter comprises a customer dollar limit threshold for all purchases within a predetermined period of time.
2. The administration apparatus of
3. The administration apparatus of
4. The administration apparatus of
5. The administration apparatus of
6. The administration apparatus of
7. The administration apparatus of
8. The administration apparatus of
9. The administration apparatus of
10. The administration apparatus of
11. A method of administering payments for transactions made by a customer that is a consumer of goods or services from a merchant, the method comprising:
providing an administrator:
creating a database in electronic communication with the administrator having a customer file and a merchant file, the customer file including a purchase parameter, the merchant file having a merchant account number and a merchant category assigned thereto, the purchase parameter including a value predetermined by the customer;
creating an administrative program in electronic communication with the administrator and having a merchant approval program, the merchant approval program being operable to query the purchase parameters in response to a transaction approval request;
transmitting a transaction approval request from the merchant approval program to the customer file to query the purchase parameter;
receiving at the merchant approval program a transaction approval request;
transmitting an approval of the transaction approval request when the request falls within the purchase parameter, wherein the purchase parameter comprises a customer dollar limit threshold for all purchases within a predetermined period of time.
12. The method of
13. The method of
This application claims the benefit of U.S. Provisional Application No. 60/143,491, filed Jul. 12, 1999.
I. Field of the Invention
The invention relates to an administration system and method for directing payment for financial obligations, and more particularly, to a system and method for electronic payment for purchases using electronic communication.
II. Description of the Prior Art
It is known to make purchases from merchants electronically over the Internet using conventional credit cards. The consumer provides a credit card number to the merchant electronically. The merchant then seeks approval from the credit card company for payment for the purchase. If the consumer is within the credit limits of his account, the credit card company will give the merchant approval for payment and the merchant then completes the transaction with the consumer. The credit card company then pays the merchant and periodically issues a written statement seeking payment from the consumer.
However, there are security and privacy problems with such a system. Anyone having the consumer's credit card number can make a purchase so long as it is within the credit limit of the card. Additionally, conventional charge cards are obtained by using paper forms which often must be delivered by the postal service before a plastic charge card is delivered to the customer. The consumer does not receive notification of the credit transaction or payments to the account until the monthly statement is issued. Because of the multitude of steps and paper documentation required to complete a transaction using either a paper check or conventional charge card, financial institutions, customers and merchants all incur high costs for the convenience of using a check or credit card. Transaction summaries are provided only once a month, thereby creating a substantial time gap if a transaction has been improperly made or improperly entered into the system.
Thus, it would be desirable to have a payment system which is easily usable, secure and provides great flexibility in payment and additional security for the consumer. Additionally, it would be desirable to provide real-time notification of changes in the customers credit account.
These and other advantages are obtained through a payment administration system providing electronic real-time notification of transactions and customer selected parameters for type of transactions and for payment options. The administrative system includes a central administrator which communicates electronically in real time with a customer, creditor or merchant, consumer's financial institution, and administrator's bank to administrate payments for transactions. The payment system permits the customer to set purchase parameters for making the transaction, choose from several payment options, and to select the timing of real-time notification of activity on the customer's account.
The administrator includes at least one database and several computer programs for administrating the database, making and collecting payments, and directing the communications. The database contains individual files for each customer in which data is entered directly by the customer. The customer enters relevant credit and personal information and selects a payment system such as credit or debit. Additionally, the customer sets purchase parameters. These parameters limit the type of purchases, the category of merchants or creditors with which the account may be used, the time of day, who can use the account, the amounts of the purchases, and payment options. The payment option includes debit or credit and includes the ability to have secondary payment accounts. After a customer file is opened in the administrative database, a credit program verifies banking and financial information and credit information to establish either a credit limit and/or to establish the necessary link with the debit bank or financial institution. If the customer information is acceptable, an account is opened in the database and credit parameters are set. The consumer is notified that the account is active electronically. The customer may then make a purchase or establish a payment mechanism for credit accounts, utilities and the like. The administrator directs payments to the creditors at predetermined times and collects from the customer's account.
The customer may then make a purchase through the system by contacting a participating merchant and providing an account number. The merchant seeks approval for the transaction from the administrator through a merchant interface. The administrator provides either approval for the purchase or denies the purchase. When the purchase is approved, the merchant completes the transaction. The sale is posted to the customer's account by the administrator. A payment program directs payment to the merchant.
The administrative system forwards a real-time transaction receipt to the customer when any transactions occur. The customer may receive daily account statements if desired or view the status of the account at any time. At a pre-selected time each month the administrator closes the customer's account and forwards a monthly statement to the customer electronically, such as by e-mail. If the customer has a credit account, the administrative system electronically withdraws an amount from the customer's financial institution in accordance with the automatic payment option selected by the customer or an amount directed by the customer. If the customer has a debit account, the administrative system obtains payment from the customer's financial institution. If the customer elects, a backup or secondary account, such as a savings or money market account may be provided. In the event that the primary account is unable to cover the payment, payment is automatically withdrawn from the secondary account.
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Once all the bank information is verified and/or approved, the account opening program 36 opens a customer account 41 in the database 28 for the customer. An account number, PIN, and expiration date are assigned. This information is then forwarded to the customer by mail. The customer is able to immediately use the account to make purchases with merchants enrolled in the payment administration system 10. If the customer wishes to have the payment administration system 10 handle periodic payments to creditors, or utilities, the customer provides account information and the account opening program establishes debit times and amounts for each payment. A payment program 39 then directs a disbursement to the creditor or utility at the selected time.
The administrative programs 30 include a merchant approval program 50 which accesses information from merchant files 40 contained in the database 28. A file 40 is opened for each merchant enrolled in the program. The merchant file 50 is assigned an account number and a merchant category is assigned. A payment account 43 is also opened and merchant banking information is entered into the file 40. This information may be entered electronically over the World Wide Web by a merchant terminal through a merchant interface 42. Once the account is opened, the merchant is permitted access to the approval program 50. The merchant approval program 50 provides the merchant with authorization for a purchase. The merchant enters the customer's account number into the merchant interface and the approval program 50 queries the database customer files 28 to verify the customer's identity and that the purchase is within the parameters established. This includes the customer's credit limit and any predefined customer selected purchase parameters 33 such as time of day, merchant type, or type of purchase of goods. If the purchase is within the parameters established, approval is given and the transaction amount is posted to the merchant account and the customer's account.
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When the customer is within a predefined percentage, such as 10% of the credit limit, the notification program 44 will be activated to deliver a real-time electronic notice to the customer advising of this fact. Likewise, the program will provide real-time notification of eligibility for increases or decreases in the credit line and/or interest rates. The customer can elect to dispense with some of the notifications, such as daily account summary, or real-time notification. Notification will then be made at periodic intervals selected by the customer.
A collection program 48 is used to transfer funds from the customer's financial institution 20 to the administrator's financial institution 18. If the customer has elected a debit account the customer's financial institution is contacted electronically after posting to debit the customer's financial institution account in the amount of the transaction. If the customer has a charge account, the notification, the collection program is activated at the appropriate time to debit the customer's financial institution account in accordance with the payment options that the customer previously made. If the customer does not have sufficient funds for the transaction in the primary or secondary withdrawal accounts, or if the customer does not make payment, a query by the notification program 44 determines whether payment has been made. If no payment is made, the notification program electronically notifies the customer that payment has not been made and/or the due date has passed.
The administration system 10 thus provides a system which is responsive to customer set parameters, both for purchases and payments, provides for real-time notification and flexibility. In one embodiment, the system can be used as a paperless payment administration system which is readily suitable for use in World Wide Web transactions. such a system permits customers to set the purchase parameters, establish security measures to prevent undesired or authorized purchases by household or family members, and provides real-time paperless notification of the status of each transaction.
Another feature of the program permits a client to establish an account that may be used with minors within predefined limits established by the parent.
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A first preferred alternative method 60 of administering payments provides real-time notification for an account status is shown in
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Variations in the system and methodologies may occur to those skilled in the art upon reviewing the subject matter of this disclosure. Such variations, if within the spirit of the real invention, are intended to encompassed by the scope of the claims appended hereto. The description of the preferred embodiment herein is meant for illustrative purposes only, and not to be interpreted as limiting the scope of the invention.
Citations de brevets